The cost-based pricing and other unfavorable terms of the PSA, which were negotiated prior to the current market structure, have helped create the perfect storm for LIPA and the Long Island ratepayers: constrained supply conditions (i.e., limited access to other regions) and high demand for energy, coupled with an excess supply of local, inefficient and expensive capacity from a pivotal supplier. As a result, capacity prices continue to clear at levels below the Net CONE, while energy prices continue to remain exceptionally high. Concomitantly, because GENCO is a pivotal supplier of both energy and capacity in the LICA, it has the perfect opportunity to manipulate the capacity and energy markets by simultaneously maintaining inefficient capacity within the LICA.smartenergyuniverse.com